Economy advantage

Highways Links

Obama Good

Plan’s massively unpopular, sparks backlash over recent spending fights

Gets dragged into polarized debates and opposition from both sides

Hunter, ’12 (Kathleen, Bloomberg staff reporter, 2/17/12, http://www.businessweek.com/news/2012-02-27/former-highway-bill-foe-boehner-scavenging-for-votes.html, JD)

Feb. 17 (Bloomberg) -- U.S. House Speaker John Boehner has never voted for highway-funding legislation, and he’s having trouble selling fellow Republicans on a plan written with them in mind. The bill he planned to push through the House this week is being delayed amid criticism from his Republican majority as well as Democrats. Although Senate Majority Leader Harry Reid, a Democrat, this week called the House plan “a love note to the Tea Party,” Republicans who have made cutting the size of government their chief goal say they are bothered by the $260 billion price tag. “We’re dipping deep, deep into the general fund for what has traditionally been limited to the highway trust fund, and that’s a level of expenditure that’s not wise,” Representative Jeff Flake, an Arizona Republican who opposes the bill, said in an interview. The plan would reauthorize the 18.4-cent federal gasoline tax and set maximum spending levels for roads, bridges and mass transit for five years. The current highway law, which expires March 31, is the eighth temporary extension since a $244 billion, four-year plan ended in 2009. “This is a much more difficult process than we’ve seen in the past,” Boehner of Ohio told reporters yesterday. “There is clearly angst on both sides of the aisle over a number of issues.” Earmarked Funds One reason, the speaker said, is that the plan lacks earmarked funds for lawmakers’ pet projects, which he has previously said numbered more than 6,000 in the last highway measure. The Republican approach to the transportation bill is aimed at appealing to a “new breed” of lawmaker with “little understanding, little appreciation for bill history, who just wants to wipe out what was,” said Jim Oberstar, a former Minnesota representative who served as the top Democrat on the Transportation and Infrastructure Committee for 16 years before he was defeated in the 2010 election. Oberstar noted that during his time on the panel, he and the top Republican would -- with their staffs -- write highway bills from scratch, regardless of which party was in the majority. Natural Republican constituencies, such as the investment and contracting sectors, have been alienated by the Republican bill, Oberstar said. ‘Uncomfortable, Miserable’ “Why would you make life so uncomfortable, miserable and uncertain on an issue like this just to make a political point?” Oberstar said. “I don’t understand it.” “In the past people were bought off with earmarks or some special provisions,” Transportation and Infrastructure Chairman John Mica, a Florida Republican, told reporters this week. “We don’t have that luxury. What we have to do is to discuss policy; that takes longer.” The plan would eliminate a program to fund bicycle trails and other transportation-related improvements that anti-tax Republicans view as wasteful. It would expand offshore drilling to provide royalties for highway spending, and raise funds by requiring federal workers to contribute more to their pensions. It also would end the designated use of 2.86 cents of the gasoline tax for mass transit and other projects to improve air quality and reduce highway congestion. Instead, the measure would provide $40 billion in general funds for those purposes. Flake objects to funding such projects at all, saying the bill’s scope should be limited to surface transportation projects that can be funded through gasoline tax revenue. Mass Transit Support Conversely, at least 10 Republicans from urban and suburban districts said they oppose the bill because it would end the automatic funding for mass transit. “As long as that’s in there I can’t vote for it,” Representative Peter King, a New York Republican, said in an interview. “That’s the only program where New York gets more money back” than it pays in gas taxes. Factions of Republicans with objections, combined with opposition from almost all 192 House Democrats, mean “the math is more than tricky, but it can be fixed, and I’m committed the helping the speaker try and fix it,” said Steve LaTourette, an Ohio Republican. House Republicans’ chief vote-counter, Majority Whip Kevin McCarthy of California, told members during a Feb. 1 closed-door party meeting that the 218 votes needed for the highway bill will have to come from within the party’s ranks, said two lawmakers who were in the room and spoke on condition of anonymity. ‘Misplaced Priorities’ Boehner told reporters Feb. 9 that the House measure is the first infrastructure highway bill he has ever supported. Prior measures, he said, “represented everything that was wrong with Washington: earmarks, endless layers of bureaucracy, wasted tax dollars and misplaced priorities.” Even without earmarks, lawmakers can be swayed by parochial concerns. Representative Cory Gardner, a Colorado Republican, said in an interview that he was working to strip a provision that would prohibit horses from being transported in double- decker trailers. The provision has “farmers, ranchers in Colorado -- a huge rodeo industry -- up in arms,” he said. President Barack Obama’s administration on Feb. 14 said it would veto the House bill, saying it would reduce safety, weaken environmental and labor protection and wouldn’t do enough to improve roads and bridges. The Senate is working on its plan, S. 1813, which would authorize $109.8 billion in spending for fiscal 2012 and 2013. Three Bills Republican leaders have split the House plan into three bills, and lawmakers are offering more than 300 amendments. The House passed the first measure last night and is set to consider the other two parts after next week’s Presidents’ Day recess. Allowing votes on amendments to expand states’ responsibility to fund roads, bridges and mass transit and to limit spending on highways and mass transit will help Republicans get the 218 votes they need, even though the amendments probably won’t be adopted, said a Republican lawmaker who is helping rally votes for the measure and spoke on condition of anonymity. The lawmaker said leaders are counting on some Republican critics to come on board after they go on the record in favor of changes. New Jersey Republican Scott Garrett proposed an amendment to create pilot programs allowing states to receive federal transportation funds through block grants. Oklahoma Republican James Lankford is pushing to let states opt out of federal highway programs, either by keeping the funds they contribute to the Highway Trust Fund or by allowing them to increase state gas taxes to cover the loss in revenue. ‘Right Direction’ Although Lankford said the highway bill was a “step in the right direction,” it wouldn’t go as far as he wanted to trim the federal government’s role in funding transportation. In previous years, the highway bill “has always been something that’s attracted three-hundred-and-something votes,” LaTourette said. This year, every Democrat on the Transportation and Infrastructure Committee voted against the bill on Feb. 6. A Democrat on the panel, Pennsylvania’s Jason Altmire, said he opposed the plan because of provisions he viewed as anti- labor and because it would eliminate automatic funding for mass transit. He predicted it will take far beyond March 31 for the House and Senate to work out a plan. “The likely outcome, everyone would agree, is we will not have a long-term highway bill by the end of the year,” Altmire said. “I just don’t see, this year, given the politics, how that’s possible.”

Recent debates prove

Plungis, ’12 (Jeff, Bloomberg staff, 3/26/12, http://www.businessweek.com/news/2012-03-26/road-work-halt-days-away-as-congress-argues-funding-bill, JD)
Congress’s rhetoric ahead of the March 31 expiration of a law funding U.S. highway and transit projects resembles the dueling that led to last July’s impasse shutting down the Federal Aviation Administration for two weeks. About 4,000 government workers were furloughed. The agency lost $468 million, according to data compiled by Bloomberg, when airlines for 16 days pocketed a ticket tax that would have been used for airport construction. The consequences of a highway-program shutdown would start with construction workers being laid off after states stop getting U.S. reimbursements to pay them, said Pete Rahn, leader of HNTB Holdings Ltd.’s transportation practice in Kansas City, Missouri. As many as 1.87 million jobs may be at risk, according to a Senate fact sheet citing Transportation Department job- calculation models. The U.S. government couldn’t collect as much as $93 million a day in gasoline taxes, he said. “This is by an order of magnitude bigger than the FAA bill,” said Joshua Schank, president and chief executive officer of the Eno Center for Transportation in Washington. “If it lasts any more than a few weeks, there would be serious damage.” Senate Majority Leader Harry Reid, a Nevada Democrat, last week urged the House to take up the bill his chamber passed March 14. He wouldn’t discuss what would be the ninth extension of highway legislation that expired in 2009. Representative Bill Shuster, a Pennsylvania Republican rounding up votes on the other side of the Capitol, said that stance may change by March 30. Vote Scheduled The House will vote on a 90-day extension today after 6:30 p.m. in Washington, according to the chamber’s daily schedule. The bill will be taken up under rules requiring a two-thirds majority to pass, meaning the 242 Republicans will need about 48 Democrats to advance the legislation. Representative Nick Rahall, the House Transportation and Infrastructure Committee’s senior Democrat, urged a “no” vote in an e-mailed statement. House leaders should schedule a vote on the Senate bill, he said. “Allowing Republicans another 12 weeks would do nothing but feed their dangerous addiction to serial extensions and damaging delays, which are causing uncertainty and chaos at the start of the construction season,” said Rahall, of West Virginia. Insolvency Potential Congress’s struggles to agree on a long-term bill have drawn out so long that the Highway Trust Fund, which pays for road and mass transit construction, is almost insolvent. Its highway account may be unable to meet its obligations as soon as October, the American Association of State Highway and Transportation Officials said Jan. 31 in a report analyzing Congressional Budget Office data. The fund’s finances have declined as cars have become more efficient and Americans drive less because of higher gasoline prices, according to the U.S. Transportation Department. If a shutdown forces gas-tax collections to stop, “these funds would be gone forever,” Rahn said. “There would be no way to make it up.” The Senate’s two-year, $109 billion transportation plan passed March 14 includes about $14 billion from other accounts and general taxpayer money to shore up the trust fund. The trust fund collected $36.9 billion from all sources in 2011, according to the CBO. When House leaders tried to bring a different bill to the floor last month, majority Republicans were so divided over how to pay for projects and whether mass transit should keep getting gasoline-tax money that it didn’t progress to a vote. Jobs at Stake House Transportation and Infrastructure Chairman John Mica, a Florida Republican, introduced a bill March 22 to extend current programs through June 30. As with the FAA bill, a lapse in the government’s authority to collect gasoline taxes won’t necessarily lead to lower fuel prices for consumers, Schank said. Senator Barbara Boxer, a California Democrat, held several news conferences last week calling for a vote on the approved bill she sponsored. Among the jobs at stake if highway funding lapses are 177,500 highway and transit positions in California, 120,300 in Texas and 113,300 in New York, according to fact sheet prepared by Senate Democrats. The Senate bill may create another 1 million jobs by expanding private-sector financing for projects, according to the fact sheet. House Speaker John Boehner, an Ohio Republican, backed off a pledge to act on the Senate bill if House members wouldn’t back Mica’s five-year, $260 billion plan. House Republicans want to bolster the Highway Trust Fund with revenue from opening up more federal land to oil and gas production, Boehner told reporters March 22.

Highway bill sparks opposition

Holtzman, ’12 (Geoff, Deputy Washington Bureau Chief/News Director, 2/12/12, http://www.talkradionews.com/news/2012/02/14/highway-bill-generates-bipartisan-backlash.html)
WASHINGTON — A series of interest groups rarely mentioned in the same breath have come together to oppose a massive transportation bill making its way through Congress. Earlier this week, the pro-environment National Resources Defense Council teamed with a coalition of conservatives — including the Competitive Enterprise Institute, the National Taxpayers Union, Taxpayers for Common Sense and the Reason Foundation — to urge House Republican leaders to scrap a reauthorization of the federal highway bill. The American Energy and Infrastructure Jobs Act (H.R. 7), which could see action as early as Wednesday, would merge a series of GOP domestic energy pet projects into the annual surface transportation legislation. The five-year measure is estimated to cost $260 billion. Meanwhile, the Senate is preparing a smaller two-year version of the bill that would total about $110 billion. In their letter, the groups urged leading lawmakers to reject using projected revenues generated by new oil drilling in areas like Alaska’s Arctic National Wildlife Refuge to aid the National Highway Trust Fund. “Further increasing the reliance of the Highway Trust Fund on revenue streams not connected to use would threaten the future health of America’s highways,” they wrote. The NRDC has on numerous occasions cited environmental health concerns as reasons for lobbying against attempts to open up ANWR. The organization and well as other like-minded groups are also opposed to a Senate GOP-led effort to attach the Keystone XL pipeline to the package. Republicans who support the bill say they have no problem with using royalty fees on the oil and gas industry to fuel new transportation infrastructure projects. “This will prevent the need for more of the same taxpayer bailouts for highway programs that occurred when Democrats ran Congress,” said House Speaker John Boehner (R-Ohio). But the groups that are opposed want the authors of the bill to stick to the traditional pay-for-use model, whereby only gas taxes are used to cover the cost of surface transportation projects, rather than tapping into unrelated revenue streams. A new Congressional Budget Office report out this week suggests that the 18.4 percent gas tax might have to increase in order for the trust fund to stay solvent. House GOP’ers are downplaying that study, arguing that it underestimates the amount of revenue that would be created by new energy expansion. Another group, the conservative Heritage Foundation, argues that while boosting domestic energy production is “sound policy,” using the potential dollars to refill the Highway Trust Fund does, in fact, amount to a bailout. “Congress should live within its means,” the group wrote, and use the drilling revenues to instead pay down the nation’s deficit. Boehner’s office, however, pushed back on that claim, saying that the energy provisions in the bill would negate the need for the Treasury Department to direct general dollars to highway projects. Meanwhile, other conservatives say the reauthorization proposal simply includes too much spending. “Instead of opening up American land to energy production and using that energy production to pay down the national debt, we will instead jack up highway spending, bankrupt the highway trust fund as a result, and then use the energy taxes to offset the project funding,” wrote conservative commentator Erick Erickson. One area where conservatives are giving Republicans credit is removing earmarks from the bill. In the past, pork dollars have been used to create tourist attractions, fund gardening projects and even build a National Corvette Museum. GOP leaders say this year’s bill contains only “pro-growth” items, as well as language to consolidate duplicative surface transportation projects. Not surprisingly, some progressives are unhappy with the decision to to cancel or cut back funding for non-highway needs. According to the Leadership Conference on Civil and Human Rights, the bill would “cripple transit systems around the country and hurt millions of people who depend on public transportation to reach jobs, doctor appointments, schools, and other necessities of everyday life.” Given such widespread opposition, it appears highly unlikely that the bill in its current form will make its way to President Obama’s desk. Yet, because Congress has not passed a full reauthorization of the highway program since 2007, lawmakers may be willing to creatively deal this time around just so they can put the issue in their rearview mirror.

Obama Bad

And investment in highway infrastructure creates jobs and economic competitiveness - ensures long-term resiliency

-plan is also politically popular

Boushey ’11 (Heather Boushey is Senior Economist at American Progress, Center for American Progress, “Now Is the Time to Fix Our Broken Infrastructure”, http://www.americanprogress.org/issues/2011/09/aja_infrastructure.html, September 22, 2011, LEQ)
Investing in infrastructure creates jobs and yields lasting benefits for the economy, including increasing growth in the long run. Upgrading roads, bridges, and other basic infrastructure creates jobs now by putting people to work earning good, middle-class incomes, which expands the consumer base for businesses. These kinds of investments also pave the way for long-term economic growth by lowering the cost of doing business and making U.S. companies more competitive. There is ample empirical evidence that investment in infrastructure creates jobs. In particular, investments made over the past couple of years have saved or created millions of U.S. jobs. Increased investments in infrastructure by the Department of Transportation and other agencies due to the American Recovery and Reinvestment Act saved or created 1.1 million jobs in the construction industry and 400,000 jobs in manufacturing by March 2011, according to San Francisco Federal Reserve Bank economist Daniel Wilson.[1] Although infrastructure spending began with government dollars, these investments created jobs throughout the economy, mostly in the private sector.[2] Infrastructure projects have created jobs in communities nationwide. Recovery funds improved drinking and wastewater systems, fixed bridges and roads, and rehabilitated airports and shipyards across the nation. Some examples of high-impact infrastructure projects that have proceeded as a result of Recovery Act funding include: An expansion of a kilometer-long tunnel in Oakland, California, that connects two busy communities through a mountain.[3] An expansion and rehabilitation of the I-76/Vare Avenue Bridge in Philadelphia and 141 other bridge upgrades that supported nearly 4,000 jobs in Pennsylvania in July 2011.[4] The construction of new railway lines to serve the city of Pharr, Texas, as well as other infrastructure projects in that state that have saved or created more than 149,000 jobs through the end of 2010.[5] Infrastructure investments are an especially cost-effective way to boost job creation with scare government funds. Economists James Feyrer and Bruce Sacerdote found for example that at the peak of the Recovery Act’s effect, 12.3 jobs were created for every $100,000 spent by the Department of Transportation and the Department of Energy—much of which was for infrastructure.[6] These two agencies spent $24.7 billion in Recovery dollars through September 2010, 82 percent of which was transportation spending. This implies a total of more than 3 million jobs created or saved. The value of infrastructure spending Analysis of all fiscal stimulus policies shows a higher “multiplier” from infrastructure spending than other kinds of government spending, such as tax cuts, meaning that infrastructure dollars flow through the economy and create more jobs than other kinds of spending. Economist Mark Zandi found, for example, that every dollar of government spending boosts the economy by $1.44, whereas every dollar spent on a refundable lump-sum tax rebate adds $1.22 to the economy.[7] In a separate study conducted before the Great Recession, economists James Heintz and Robert Pollin of the University of Massachusetts, Amherst, found that infrastructure investment spending in general creates about 18,000 total jobs for every $1 billion in new investment spending. This number include jobs directly created by hiring for the specific project, jobs indirectly created by supplier firms, and jobs induced when workers go out and spend their paychecks and boost their local economy.[8] Investing in transportation infrastructure in particular boosts employment. The Federal Highway Administration periodically estimates the impact of highway spending on direct employment, defined as jobs created by the firms working on a given project; on supporting jobs, including those in firms supplying materials and equipment for projects; and on indirect employment generated when those in the first two groups make consumer purchases with their paychecks. In 2007, $1 billion in federal highway expenditures supported about 30,000 jobs—10,300 in construction, 4,675 in supporting industries, and 15,094 in induced employment.[9] Investing in infrastructure not only creates jobs; it increases the productivity of businesses small, medium, and large. At the most basic level, infrastructure investments make it possible for firms to rely on well-maintained roads to move their goods, on an electricity grid that is always on to run their factories, and water mains that provide a steady stream of clean water to supply their restaurants. There is a large body of empirical work that documents this. Although the specific effect differs across studies, European Investment Bank economists Ward Romp and Jakob de Haan conclude that “there is now more consensus than in the past that public capital furthers economic growth.”[10] Because infrastructure investments create jobs and boost productivity, these investments have historically had bipartisan support. In early 2011, for example, AFL-CIO President Richard Trumka and U.S. Chamber of Commerce President Thomas Donohue issued a joint statement in favor of greater infrastructure investment in the near-term: “With the U.S. Chamber of Commerce and the AFL-CIO standing together to support job creation, we hope that Democrats and Republicans in Congress will also join together to build America’s infrastructure.”[11] But investments in infrastructure are now being pared back as states and localities struggle with budget constraints. Even so, there is a long list of infrastructure projects that municipalities, states, and the federal government can invest in. The American Society of Civil Engineers estimates that we need to spend at least $2.2 trillion over the next five years just to repair our crumbling infrastructure.[12] This doesn’t even include things like high-speed rail, mass transit, and renewable energy investments we need to free ourselves from foreign oil and climate change. The American Jobs Act The American Jobs Act seeks to remedy this situation by investing $105 billion in infrastructure.[13] This should raise U.S. economic output by $151.2 billion based on economist Mark Zandi’s most recent economic multiplier for the impact of infrastructure spending on GDP.[14] The American Jobs Act addresses a number of specific infrastructure investments. The $105 billion includes $25 billion to modernize and upgrade our school infrastructure and an additional $5 billion to modernize community colleges. We know there is great need for this kind of investment.[12] The accumulated backlog of deferred maintenance and repair for schools alone amounts to at least $270 billion.[15] The total investment in infrastructure also includes $50 billion in immediate investments for highway, highway safety, transit, passenger rail, and aviation activities. Of that $50 billion, $27 billion will make our nation’s highway systems more efficient and safer for passenger and commercial transportation. Another $9 billion of investments will repair our nation’s transit systems, $2 billion will improve intercity passenger rail service, and $2 billion will improve safety, add capacity, and modernize airport infrastructure across the country. In addition, $10 billion of American Jobs Act funds will be used to set up a National Infrastructure Bank that would provide loans for projects including transportation infrastructure, water infrastructure, and energy infrastructure. The remaining $15 billion would provide funding for neighborhood stabilization projects and the repurposing of vacant properties. Infrastructure is a good investment now because it will get people to work, and at this point, given the lingering high unemployment, we shouldn’t be too concerned if projects take a bit of time to get up and running. As Mark Zandi said in August 2011: Infrastructure development has a large bang for the buck, particularly now when there are so many unemployed construction workers. It also has the potential for helping more remote hard-pressed regional economies and has long-lasting economic benefits. It is difficult to get such projects up and running quickly—“shovel ready” is in most cases a misnomer—but given that unemployment is sure to be a problem for years to come, this does not seem in the current context as significant a drawback.[16] We can create jobs. With nearly 14 million Americans unemployed, now is the time to make long-lasting investments in infrastructure that will not only get people to work today but pave the way for long-term economic growth. Repairing potholes, upgrading an elementary school’s aging furnace, and replacing old water mains are all infrastructure investments. These are repairs that must be done and are often cheaper to do as maintenance than waiting to repair a totally failed system. Now is the right time for America to invest in maintaining and upgrading our infrastructure. We have millions of American workers who want to get off the unemployment queue and into a job and borrowing costs at decade lows, making it extraordinarily cost effective to make big investments today.

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